Updated April 16, 2020
When applying for a loan through the Paycheck Protection Program, you will be asked to provide your average monthly payroll costs and supporting documentation. This article will give an overview of the new Paycheck Protection Program report that you can run and export directly from OnPay. This report will help you determine your your average monthly payroll and can be provided with your loan application.
- What are average monthly payroll costs?
- What date range should I use for reporting average monthly payroll?
- How to run a Paycheck Protection Program (PPP) report in OnPay
Average monthly payroll costs
The Department of Treasury defines the following as payroll costs:
- Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
- Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
- State and local taxes assessed on compensation; and
- For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
What date range should I use for reporting average monthly payroll?
- For most applicants, you will will use the average monthly payroll for 2019 (Jan 1, 2019 - Dec 31, 2019). However, depending on your lender, you may be asked to provide average monthly payroll for the most current 12 months (Apr 1, 2019 - Mar 31, 2020).
- For seasonal businesses, you may elect to instead use average monthly payroll for the time period between Feb 15, 2019 - Jun 30, 2019.
- For new businesses, average monthly payroll may be calculated using the time period from Jan 1, 2020 - Feb 29, 2020.
All calculation methods should exclude costs over $100,000 on an annualized basis for each employee.
How to run a Paycheck Protection Program (PPP) report in OnPay
From the main dashboard, navigate to COVID-19 in the blue side menu.
On this page, you will see that in the first section you have the option to run a PPP report.
Click the blue PPP Report button. Select the date range you want to use for your report, and click View Report. (If you are unsure which date range you should use to calculate average monthly payroll, see more above.)
Note: If you were not a client of OnPay for the full date range selected, you may need to obtain additional data from your prior provider or your own records.
The report will automatically generate, calculating your adjusted average monthly payroll.
Note: The CARES Act outlines that payroll costs covered by these PPP loans will be capped at an annual salary of $100,000 for each employee. The report will automatically account for this cap in the Adjusted Payroll Cost column, excluding compensation over $100,000 on an annual basis by limiting monthly compensation to $8333.33.
You can print or download the PDF to use when submitting your loan application to a lender.
Please remember that you are responsible for the information submitted to the SBA or any other lending institution to obtain a loan. Review and the confirm the data in the report as well as any additional information required for you application.
About SBA Loans for the Paycheck Protection Program
Through the new Paycheck Protection Program (PPP) authorized by the CARES Act, many small business employers impacted by COVID-19 will be eligible to receive loans of up to $10 million. In particular, as a part of this program the SBA will forgive loans for employers maintaining or quickly rehiring employees and keeping them on the payroll. You can learn more about the Paycheck Protection Program, eligibility criteria, and how to apply here.
Keep up to date with all of this and more by checking our COVID-19 Resource Center. We’re updating it regularly as there are new developments and government guidance.
Please note that as COVID-19 legislation is changed or extended, always refer to IRS guidance for the most up-to-date information.